The difference between a company's sales and cost of goods sold isreferred to as the:a. gross profit.b. net income.c. retained earnings.d. gain on the sale.e. operating profit.

The correct answer is:a. gross profit. Explanation:Gross Profit:The difference between a company's…

Answered: The difference between a company's…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter2: Building Blocks Of Managerial Accounting

Section: Chapter Questions

Problem 4MC: Which of the following represents the components of the income statement for a service business...

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Which of the following represents the components of the income statement for a service business Sales Revenue - Cost of Goods Sold = gross profit Service Revenue - Operating Expenses = operating income Sales Revenue - Cost of Goods Manufactured = gross profit Service Revenue - Cost of Goods Purchased = gross profit
A multi-step income statement ________. A. separates cost of goods sold from operating expenses B. considers interest revenue an operating activity C. is another name for a simple income statement D. combines cost of goods sold and operating expenses
How do you calculate the markup on cost of goods sold? Is the markup pure profit? Explain.
In the income statement, Freight-In is (a) added to purchases. (b) subtracted from purchases. (c) added to sales. (d) subtracted from cost of goods.
Which of the following represents the components of the income statement for a merchandising business? A. Sales Revenue - Cost of Goods Sold = gross profit B. Service Revenue - Operating Expenses = gross profit C. Sales Revenue - Cost of Goods Manufactured = gross profit D. Service Revenue - Cost of Goods Purchased = gross profit
Which of the following represents the components of the income statement for a manufacturing business? A. Sales Revenue - Cost of Goods Sold = gross profit B. Service Revenue - Operating Expenses = gross profit C. Service Revenue - Cost of Goods Manufactured = gross profit D. Sales Revenue - Cost of Goods Manufactured = gross profit
Using the following information, prepare the Cost of Goods Sold section of an income statement.
Identify each of the following items relating to sections of an income statement as Revenue from Sales (S), Cost of Goods Sold (CGS), Selling Expenses (SE), General Expenses (GE), Other Income (OI), or Other Expenses (OE). a. Utilities Expense b. Advertising Expense c. Purchases Discounts d. Sales Returns and Allowances e. Interest Income f. Freight In g. Depreciation Expense, Equipment h. Interest Expense i. Rent Expense j. Sales
Which of the following accounts would be reported under operating expenses on a multi-step income statement? A. sales B. advertising expense C. sales returns and allowances D. interest expense
Which of the following ratios is used to measure a firms profitability? a. Liabilities Ă· Equity c. Sales Ă· Assets b. Assets Ă· Equity d. Net Income Ă· Net Sales
Which of the following is a measurement of earnings that represents the profit before interest, taxes, depreciation and amortization are subtracted? A. net income B. retained earnings C. EBITDA D. EPS
Net Sales Cost of Goods Sold is equal to: - a. Gross Expenses. b. Gross Profit. c. Operating Expenses. d. Net Income from Operations.

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The difference between a company's sales and cost of goods sold is referred to as the: a. gross profit. b. net income. c. retained earnings. d. gain on the sale. e. operating profit.